Phase I Environmental Assessments (Phase I ESA) are the first step in the environmental due diligence process. A Phase I ESA is a review of available information regarding a property to determine the possibility contamination may be present. The assessment includes a review of environmental databases, file reviews, interviews with regulators/property owners and a site walkover by an environmental consultant.
To encourage more reuse of brownfields, Congress amended CERCLA to provide a liability defense to prospective purchasers of property who perform adequate due diligence pre-acquisition (i.e. the "Bona Fide Purchaser Defense" or BFPD). In 2012, U.S. EPA made the BFPD potentially available to tenants who perform adequate environmental due diligence before signing a lease.
U.S. EPA enacted the "All Appropriate Inquiries" (AAI) rule to specify the requisite level of due diligence necessary to establish the BFPD. Under AAI, a purchaser/tenant must obtain an Phase I ESA prior to taking ownership or signing the lease. The Phase I ESA must meet the standards set forth by ASTM 1527.
There have been several versions of ASTM 1527. Under ASTM 1527-05, consultant stated it was unclear whether the assessment must include the evaluation for potential vapor migration risk into buildings. In order to make it clear, ASTM updated the standard, releasing 1527-13 in November of 2013.
One of the most significant changes was the addition of specific language requiring the Phase I ESA to assess vapor migration risk. In December 2013, U.S. EPA incorporated ASTM 1527-13 into AAI. Since December of last year virtually all Phase Is purport to satisfy ASTM 1527-13.
What is Vapor Intrusion?
Vapor migration occurs when soil and groundwater contamination can volatilize and migrate up through soil into buildings over or near the contamination. Volatile Organic Compounds (VOCs) and Semi-VOCs are the most likely to cause vapor migration issues.
Common sources of contamination that can cause vapor migration issues are gas stations, dry cleaners or other industrial sites (especially those that utilized solvents).
Prospective purchasers or tenants of buildings with vapor migration risk can face issues regarding exposure of occupants to air deemed unsafe.
ASTM revised the Phase I ESA to mandate an assessment of vapor migration risks due to the increased knowledge regarding the risk presented.
Survey Indicates a Large Portion of Phase Is Still Don’t Evaluate Vapor Intrusion Risks
Environmental Data Resource, Inc. (EDR) surveyed over 100 environmental consultants who regularly perform Phase I ESAs. Of those surveyed, only 55% indicated that they began to review vapor intrusion risks as part of their Phase I ESA when ASTM 1527-13 was finalized in November 2013.
EDR stated that the survey results show the review of vapor migration risk has become "industry practice." The number of consultants reviewing vapor migration risks had dramatically increased since it was adopted in November 2013. However, nearly 1/2 of all Phase I ESA don’t evaluate the risk.
With the amendment of AAI to reference ASTM 1527-13, every Phase I ESA should be reviewed to make sure vapor migration risk was evaluated by the consultant.
What is the Appropriate Methodology for Evaluating Vapor Migration?
With the dramatic risk in the number of consultants evaluating vapor migration risk, the issue has pivoted from whether to perform the analysis to the proper methodology for evaluating the risk. In 2010, ASTM 2600 was published which provided a screening method for vapor migration risk. However, many deem ASTM 2600 too rigorous.
The EDR survey found that only 27% of respondents screened for vapor migration using ASTM E2600- the only industry recognized standard for screening brownfield sites for potential vapor migration. Of those responding, 44% said they just review the data compiled by the Phase I to determine if further research is needed.
From a legal perspective, it is important to remember that the BFPD is a defense. Meaning, a party who asserts the defense must demonstrate they met the requirements of the AAI. Properly documenting what was done to evaluate vapor intrusion could be a critical issue in establishing the BFPD. Therefore, Phase I ESA should be reviewed carefully to determine whether there is adequate documentation included in the report.